Spain tells British residents to disclose assets

27/03/2013

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Life in the sun used to be so idyllic for British expats. A stiff gin was followed by a stroll to the British shop to stock up on HP sauce, followed by a leisurely round of golf then a few beers and fish and chips in one of the expat pubs on one of the costas.

This Eden on the Med has not been quite such a dream escape in recent years. Exchange rates made the British pension less lavish, while plummeting property prices made a return home prohibitive. Now the Spanish government is cracking down on an Englishman’s right to keep his financial dealings strictly between him and that sound chap who does his accounts.

The Telegraph, the expats’ newspaper of choice (along with the Mail) reports that the Spanish government is demanding that British residents disclose full details of their overseas assets to the Spanish tax authorities.
New legislation means that residents (classified as anyone who spends more than 183 days a year in Spain) must declare all assets above a value of 50,000 euros (£44,000). There are substantial fines, starting from 10,000 euros, for anyone failing to comply.

This has caused a flurry of panic among the lobster-tanned retirees on the costas. Accountant David Truman told the Telegraph that it could even provoke a mass exodus. "My understanding is that clients are considering or are leaving Spain as a result of the introduction of the new rules," he said. "It does appear to be concerning people, and it does appear to be driving people out of the country."

Foreign Office figures estimate that there are 800,000 Britons living all or part of the year in Spain, with many neglecting to go through the bureaucratic procedures required for residency. There is concern in Spain that many foreign residents are failing to fulfil their tax requirements and this has fuelled resentment among Spaniards hit by the country’s severe austerity programme.